Dispatches from the space race

Revealed: the top 20 university cities for investment

Knight Frank’s latest Student Property Report argues that it will be business as usual in the booming student market:

Government changes to higher education funding are unlikely to deter student applications and intake significantly.

Undoubtedly, the exponential growth we have experienced in the past decade will taper off, but the Higher Education Policy Institute forecasts that after a one-off dip in applications in 2012 student demand will recover and show steady growth.

Young people will continue to see the value of a graduate degree, particularly in a recession, when faced with an increasingly competitive employment market.

The revised funding system is forecast to allow for a 10% increase in university places over three years but, unlike before, individual institutions will face no restrictions from the government on how many students they can admit.

Those institutions that are regularly oversubscribed will be free to increase the number of places more quickly, enabling them to increase their fees faster than their less popular counterparts.

However, while the report argues that the market will still be strong, it also tips 20 key cities, based on patterns of student demand and the supply of accommodation, where investment looks like a good bet.

They add the caveat that this list (20 from a total of 66) is not exhaustive and note that “there are 46 locations outside of this list that host universities many of which still have compelling investment dynamics”.

NB: It should also be added that while their general argument on student numbers has relevance to all investors in the sector, their focus in producing this list is on investment in purpose-built developments.